WATER TAX ALSO TO PAY FOR SEWERAGE INFRASTRUCTURE DEVELOPMENT?

Dear Editor

I refer to the article “Water fees ‘cover only PUB ops and asset depreciation’” (Straits Times, Mar 3).

It states that “The money that people pay for using water is enough to cover only the operations of national water agency PUB and the depreciation of its water works, pipelines and water reclamation plants, Finance Minister Heng Swee Keat said yesterday. The annual surpluses PUB gets are transferred to its reserves to finance its plants and equipment, he told the House, addressing the issue of the water price hike that surfaced throughout the Budget debate. “The Government pays for part of the total cost of securing a safe and clean supply of water for our people and businesses,” he added, as he underlined the strategic value of water and updated members on plans for investments in the water system.

PUB intends to invest $4 billion on additional water infrastructure in the next five years. The sewerage network will be improved as well. A deep tunnel sewerage system, costing more than $4 billion, will be completed in 2025. Another $3 billion will be spent on other sewerage network projects, and to strengthen the resilience of the water supply, in the next five years. These expenses exceed the revenue from the water conservation tax, which is expected to be about $1.6 billion in the five-year period, he added.”

Water revenue pay for sewerage development? Since when did the price that the people pay for water has to also cover for the cost of sewerage infrastructure development? Has this ever been mentioned in Parliament, in the media, or for that matter – anywhere in the world? Do other countries do this? Do other countries price their water to cover sewerage infrastructure development?

A new reason everyday? The Government seems to be coming out with new reasons to justify the price increase, almost on a daily basis – since the price increase was announced. Why weren’t Singaporeans told in the first instance?

Anyway, to put the numbers in perspective – the “$4 billion on additional water infrastructure in the next five years” and “$3 billion ($1.4 billion net – less the $1.6 billion water conservation tax) will be spent on other sewerage network projects, and to strengthen the resilience of the water supply, in the next five years” – giving a net total of about $5.4 billion in the next five years, is only just about equal to one year’s (FY2016) Budget surplus of $5.2 billion. If we add back the $3.6 billion transfers to trust and endowment funds (which should not be charged as a one time expenditure according to IMF fiscal reporting guidelines) – the surplus is $8.8 billion. The estimated Budget Cash Surplus (under the full IMF guidelines) may be about $20 billion like in the previous years. And we have not even talked about the PUB’s projected profits of $1.1 billion in the next five years after the price increase (last year’s $167 million profits x 132% x 5 years).

With regard to “A deep tunnel sewerage system, costing more than $4 billion, will be completed in 2025” – is part of this cost already included in the “$3 billion in the next five years” and since it will only be completed in 2025 – what is the cost from now till the next five years?

Leong Sze Hian

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